A short history of Web3 gaming
Blockchain games started out as simply lighthearted efforts to test what could be done with the tech — but by now, they are touted as the most likely route to mass adoption. The next challenge is making sure they reach that potential.
If you believe the headlines, blockchain gaming is all about NFTs, is ruining games, and is already over. Of course, none of that is true, is it? Despite a few colorful disasters, and dramatic backlash from mainstream gamers, Web3 games have already come far and are set for thrilling growth… as long as developers can learn from mistakes of the past.
Early experiments and surprise success
The first blockchain game wasn’t really a proper game, and wasn’t intended to survive longer than a year. Huntercoin was created in 2014 as an experiment to test multiplayer blockchain usage, and was billed as a “human minable cryptocurrency”, or in other words, a coin that was issued based on human effort. To mine coins, players had to play the game. There wasn’t much to it, just collecting coins and killing other players, so “hunters” were in it purely for the token. Predictably, the network was overrun with bots and struggled with lag and other technical problems.
A few years later, another low-stakes experiment was launched, and this one took off so fast it nearly brought down the Ethereum network. CryptoKitties’ concept was as simple (and nearly as profit-oriented) as Huntercoin’s — earn crypto by breeding and trading digital assets — but using NFTs rather than coins made the assets collectible, and of course, the kitties had the cute factor to enhance the inherent charm of uniqueness, providing an extra reason to play.
So CryptoKitties did a lot better than Huntercoin; rather too well. The crypto world went wild for CryptoKitties and within weeks of launch, the game had clogged up Ethereum, accounting for as much as 25% of network activity and delaying transactions for days. When gas fees became more expensive than the actual kitties behind the transactions, that signalled a big problem. Even as CryptoKitties buzz drove an impressive bull run for Ether, the kitties themselves lost momentum.
The game’s slow death over the next few years can be traced to basic economics. If the appeal is rooted in earnings, players will lose interest when the price falls; and given that kitties are breedable, creating a steady supply of assets, it is hard to sustain rising prices. Attracting new players helps, but with steep prices (and gas fees) forming a high entry barrier, there was limited scope to grow the user base.
P2E’s early promise turned sour
The next blockchain game to hit mainstream consciousness had the same underlying problems. Axie Infinity was launched in March 2018, just as CryptoKitties were fizzling, but really took off only two years later. At the same time as cryptocurrencies were gaining in value and credibility, the Covid-19 lockdown left many people out of work — and in the Philippines in particular, some turned to the “play-to-earn” game as a way to earn tokens that had real value in relation to their own currency.
The game was yet another twist on breedable, collectible NFTs, though with a bit more variety since Axies could be battled (using Pokémon-style mechanics) and kingdoms built. But, again, since the earnings appeal relied on market value of the game token, players abandoned ship when that value fell. Between 2022’s general crypto market slump and a record $630 million hack, many players saw no reason to log on. By June 2022, daily activity had shrunk to below 600,000 users — less than a third of its peak in late 2021.
The developer has pivoted away from the P2E label with a new version that promises more varied gameplay (and entices newbies with free, non-tradable, non-breedable starter Axies), but the very public Axie crisis has already had a toxic effect on perceptions of blockchain gaming. In a community with well-established resistance to in-game monetization efforts, many gamers are quick to paint NFT-backed digital assets as a cash grab, and the hostility runs deep: even Ubisoft employees voiced loud objections to the company’s move to sell NFTs. Anger at crypto scams and carbon cost makes this a much harder battle to fight than getting players used to microtransactions. So it’s understandable that many mainstream studios dipping their toes into blockchain have backtracked, but meanwhile, what’s happening within Web3?
“To the moon” and beyond?
Blockchain gaming right now is an incredibly fast-developing space, as game creators have realized there’s a lot more they can do with NFTs than breeding and trading. The range of titles available spans every category, from casual mobile games to elaborate sims and immersive space adventures. And blockchain games such as Alien Worlds, Decentraland and Evolution Land are also taking their place at the heart of the emerging metaverse. But it’s notable that reviews of these games often focus on whether they’re a good investment.
In other words, at this stage of the sector’s evolution, P2E is still seen as a strong driver of game activity, which leaves games highly vulnerable to shifts in market sentiment. To achieve sustainable traction, games may need to focus more on entertainment value, with tokens integrated as a supportive element, not the main draw.
To date, the sector has been held back partly by a double-edged skills gap. On the one side, traditional games developers have a lot to learn about blockchain. On the other, crypto experts aren’t well versed in what makes a great game. Ajuna was created specifically to bridge this gap — we make it easy to integrate blockchain assets into any game, and we provide tools for creating great player experiences in decentralized games using the leading engines. We also have unique solutions to the technical challenges of latency and performance that have plagued game creators.
That means that, building on Ajuna, developers are limited only by their imagination. We can help you make a game that’s as impressive and thrilling as any AAA title — here’s how. The field is wide open for games to show that the token is the least exciting part.
